Its a tuff decision.   Like the other poster said, if there is sentimental value, that changes things.

My dad totally remodeled his house for about 1/3 the cost of our new house......   That being said, there are things in his house that he still is not happy with.   Ive been up there 3 times this year shoveling parts of the roof.   My house has spray foam everywhere, no roof problems.  

When I built, it was on a location we love, got the plans we wanted, and figured a good 30 years of living before thinking of somewhere else.  We could have saved around 70 grand by going with cheaper windows, bat insulation, furnace instead of geothermal, shingles instead of shakes, cement block instead of poured inulated formed basement......etc....   Figured 2300 bucks a year to have the house were planning on living for 30 years was worth it.   I do think that figure is high, as our total energy consumption is about 200 bucks a month for a 4000+ Sq Ft house, and a 1440 sq ft garage (heat and AC in garage is hooked up to the house Geo).

My dads house is where the family settled long before me, so I see why he went that route, and its a very fine home.....    Nothing wrong with either choice......